I have recently returned from a trip to China sponsored by the China-United States Exchange Foundation (CUSEF) and the China Association for International Friendly Contact (CAIFC). On the trip with me were four Former Members of Congress, all of whom have outstanding records and greatly contributed to the success of the trip. They were Congressman Jay Rhodes (R-AZ), Congressman Dennis Hertel (D-MI), Congressman Bill Zeliff (R-NH), and Congressman Sam Gejdenson (D-CT). This report and any errors in this report are mine although I believe that all five of us agreed on much of what is written. I have asked them to send me their thoughts which I will include in future letters.

China hopes to bring an economic boom to the western part of the country through an expansion of the railroads. China already has the world’s busiest railroad system but that network is not yet sufficient to meet China’s developmental or environmental needs. In 2009, railroad construction invigorated the economy by creating 6 million jobs and generating demand for 20 million tons of steel and 120 million tons of cement. A Maglev train goes from Shanghai to the airport with a top speed of 292 miles per hour, and other high speed conventional railroads are either operational or under construction. Shanghai is developing a new roll-on/roll-off port which will be built 17 kilometers from the harbor with a road to the port. Last time I was in Shanghai in 1994, the Chinese took me to the highest point in an area called Pudong. Today it is hard to find the tower I climbed, as there is one skyscraper after another and numerous cranes continuing the development with no end in sight.

There are a limited but increasing number of democratic elections at the municipal level, but such elections have not occurred at regional or national levels. The Communist Party maintains single party political control. There is substantial privatization of the economy and movement away from state-owned enterprises, so that the economic system in the present day is far from the command economy traditionally associated with Communism. The Chinese resent you discussing Taiwan or the Dalai Lama; they see these issues as core internal matters and become very upset with other countries such as the United States for involving itself in internal decisions. Given these cultural sensitivities, it is difficult to get in an open discussion with many Chinese on such topics. We did have several meetings with extremely high-level officials, but many people with whom we met seemed to have similar talking points as to issues of Taiwan, the Dalai Lama, and currency valuation.

Intellectual property protection is still a tremendous problem in China, 74% of U.S. companies report that enforcement is totally ineffective or only marginally effective. U.S. companies in China are not there to manufacture low cost items to export to the United States. Most of them want to sell into the China market with its growing middle class. The Chinese are starting to limit U.S. companies’ competition in China through various government incentives and regulations. For instance, China is putting new regulations in place to get larger investments out of foreign services providers operating within China.

Eighty percent of the electricity in China is fueled by coal. China is now importing coal. Pollution is still bad, which is why China has placed serious emphasis on green technologies, such as hydroelectric, solar or nuclear, and has made it a major priority to be a leader in development of electric cars.

China’s governing philosophy is based on growth and stability — and from an American standpoint you also have to add patience. China is not going to approach Iran or North Korea with the same aggressiveness as the United States. They indicated to us that they don’t want to get that involved and feel that it will work out through “quiet diplomacy.” I pointed out to them that Iran was a ticking time bomb and patience may not be the answer. Israel, if it feels threatened, will act to protect itself no matter what the U.S. says. Regarding North Korea, they say that patience and diplomacy will bring stability to the area. You would hope with the North Korean missiles on the Chinese border they would be more forceful in trying to broker an agreement with North Korea, but at the same time, they have significant concerns about North Koreans flooding into China if the regime collapses or is attacked.